sábado, 25 de marzo de 2017

Just a few months into the Trump administration,
it still isn’t clear what course the president’s foreign policy will
ultimately take. What is clear, however, is that the
impulsiveness, combativeness, and recklessness that characterized Donald
Trump’s election campaign have survived the transition into the
presidency. Since taking office, Trump has continued to
challenge accepted norms, break with diplomatictraditions,
and respond to perceived slights or provocations with insults
or threats of his own. The core of his foreign policy message is that
the United States will no longer allow itself to be taken advantage of
by friends or foes abroad. After decades of “losing” to other countries,
he says he is going to put “America first” and start winning again.

It
could be that Trump is simply staking out tough bargaining positions as
a tactical matter, the approach to negotiations he has famously called
“the art of the deal.” President Richard Nixon long ago developed the
“madman theory,” the idea that he could frighten his adversaries into
believing he was so volatile he might do something crazy if they failed
to meet his demands—a tactic that Trump, whose reputation for volatility
is firmly established, seems particularly well suited to employ.

The
problem, however, is that negotiations sometimes fail, and adversaries
are themselves often brazen and unpredictable. After all, Nixon’s madman theory—designed
to force the North Vietnamese to compromise—did not work. Moreover,
putting the theory into practice requires the capacity to
act judiciously at the appropriate moment, something that Trump, as
president, has yet to demonstrate. And whereas a failed business deal
allows both parties to walk away unscathed if disappointed, a failed
diplomatic gambit can lead to political instability, costly trade
disputes, the proliferation of dangerous weapons, or even war. History
is littered with
examples of leaders who, like Trump, came to power fueled by a sense of
national grievance and promises to force adversaries into submission,
only to end up mired in a military, diplomatic, or economic conflict
they would come to regret.

Will that happen to Trump? Nobody knows. But what if one could? What if, like Ebenezer Scrooge in Charles Dickens’ A Christmas Carol,
Trump could meet a ghost from the future offering a vision of where his
policies might lead by the end of his term before he decides on them at
its start?

The problem is that negotiations sometimes fail, and adversaries are themselves often brazen and unpredictable.

It
is possible that such a ghost would show him a version of the future in
which his administration, after a turbulent start, moderated over time,
proved more conventional than predicted, and even had some success in
negotiating, as he has pledged, “better deals.” But there is a real risk
that events will turn out far worse—a future in which Trump’s erratic
style and confrontational policies destroy an already fragile world
order and lead to open conflict—in the most likely cases, with Iran,
China, or North Korea.

In
the narratives that follow, everything described as having taken place
before mid-March 2017 actually happened. That which takes place after
that date is—at least at the time of publication—fiction.

STUMBLING INTO WAR WITH IRAN

It
is September 2017, and the White House is consumed with a debate
about options for escalation with Iran. Another dozen Americans have
been killed in an Iranian-sponsored attack on U.S. soldiers in Iraq, and
the president is frustrated that previous air strikes in Iran failed to
deter this sort of deadly aggression. He is tempted to retaliate much
more aggressively this time but also knows that doing so risks
involving U.S. troops even further in what is already a costly and
unpopular war—the very sort of “mess” he had promised to avoid. Looking
back, he now sees that this conflict probably became inevitable when he
named his foreign policy team and first started to implement his new
approach toward Iran.

Well
before his election, of course, Trump had criticized the Iran
nuclear agreement as “the worst deal ever negotiated” and promised to
put a stop to Iran’s “aggressive push to destabilize and dominate” the
Middle East. Some of his top advisers were deeply hostile to Iran and
known to favor a more confrontational approach, including his first
national security adviser, Michael Flynn; his CIA director, Mike Pompeo;
his chief strategist, Steve Bannon; and his defense secretary, James
Mattis. Some of Mattis’ former military colleagues said he had a
30-year-long obsession with Iran, noting, as one marine toldPolitico, “It’s almost like he wants to get even with them.”

During
his campaign and first months in office, Trump whipped up anti-Iranian
feelings and consistently misled the public about what the nuclear deal
entailed. He falsely insisted that the United States “received
absolutely nothing” from it, that it permitted Iran to eventually get
the bomb, and that it gave $150 billion to
Iran (apparently referring to a provision of the deal that allowed Iran
to access some $50 billion of its own money that had been frozen in
foreign accounts). Critics claimed that the rhetoric was reminiscent of
the Bush administration’s exaggerations of Iraq’s weapons of mass
destruction programs in the run-up to the Iraq war. In February 2017, in
response to an Iranian ballistic missile test, Flynn brashlydeclared that he was “officially putting Iran on notice.” Two days later, the administration announced a range of new sanctions on 25 Iranian individuals and companies involved in the ballistic missile program.

Trump whipped up anti-Iranian feelings and consistently misled the public about what the nuclear deal entailed.

Perhaps
just as predictably, Iran dismissed the administration’s tough talk. It
continued to test its missiles, insisting that neither the nuclear deal
nor UN Security Council resolutions prohibited it from doing so. Ali
Khamenei, Iran’s supreme leader, even taunted Trump for his
controversial immigration and travel ban, thanking him on Twitter for
revealing the “true face” of the United States. Tehran also continued
its policy of shipping arms to the Houthi rebels in Yemen and providing
military assistance to Bashar al-Assad’s regime in Syria, neither
of which proved particularly costly to the Iranian treasury. U.S.
efforts to get Russia to limit Iran’s role in Syria were ignored, adding
to the White House’s frustration.

To
the surprise of many, growing U.S. pressure on Iran did not immediately
lead to the collapse of the nuclear deal. As soon as he took office,
Trump ended the Obama administration’s practice of encouraging banks and
international companies to ensure that Iran benefited economically from
the deal. And he expressed support for congressional plans to sanction
additional Iranian entities for terrorism or human rights violations, as
top officials insisted was permitted by the nuclear deal. Iran
complained that these “backdoor” sanctions would violate the agreement
yet took no action. By March 2017, U.S. officials were concluding
internally—and some of the administration’s supporters began to
gloat—that Trump’s tougher approach was succeeding.

Different
behavior on either side could have prevented relations from
deteriorating. But ultimately, the deal could not be sustained. In the
early summer of 2017, real signs of trouble started to emerge. Under
pressure from hardline factions within Iran, which had their own
interest in spiking the deal, Tehran had continued its provocative
behavior, including the unjustified detention of dual U.S.-Iranian
citizens, throughout the spring. In June, after completing a review of
his Iran policy, Trump put Iran’s Islamic Revolutionary Guard Corps on
the State Department’s list of foreign terrorist organizations and
announced that continued sanctions relief would be contingent on
Iran’s release of all U.S. detainees and a return to negotiations to
address the nuclear deal’s “flaws.” Instead of submitting to these
demands, Iran responded with defiance. Its new president, a hard-liner
who had defeated Hassan Rouhani in the May 2017 election, declared that
in the face of U.S. “noncompliance,” Iran would resume certain
prohibited nuclear activities, including testing advanced centrifuges
and expanding its stockpile of low-enriched uranium. Washington was
suddenly abuzz with talk of the need for a new effort to choke off Iran
economically or even a preventive military strike.

The
Trump administration had been confident that other countries would back
its tougher approach and had warned allies and adversaries alike
that they must choose between doing business with Iran and doing
business with the United States. But the pressure did not work as
planned. China, France, Germany, India, Japan, Russia, South Korea, and
the United Kingdom all said that the deal had been working before the
United States sought to renegotiate it, and they blamed Washington for
precipitating the crisis. The EU even passed legislation making
it illegal for European companies to cooperate with U.S. secondary
sanctions. Trump fumed and vowed they would pay for their betrayal.

As
the United States feuded with its closest partners, tensions with Iran
escalated further. Frustrated by continued Iranian support for the
Houthi rebels in Yemen, the Pentagon stepped up patrols in the Strait of
Hormuz and loosened the rules of engagement for U.S. forces. When an
Iranian patrol boat aggressively approached a U.S. cruiser, in
circumstances that are still disputed, the U.S. ship responded with
deadly defensive force, killing 25 Iranian sailors.

The
outrage in Iran bolstered support for the regime and led to widespread
calls for revenge, which the country’s new president could not resist.
Less than a week later, the Iranian-backed militia group Kataib
Hezbollah killed six U.S. soldiers in Iraq. With the American public
demanding retaliation, some called for diplomacy, recalling how, in
January 2016, U.S. Secretary of State John Kerry and Iranian Foreign
Minister Mohammad Javad Zarif spoke directly to defuse the situation
after U.S. sailors drifted into Iranian waters. This time, the EU
offered to mediate the crisis.

But
the administration wanted nothing to do with what it considered the
Obama administration’s humiliating appeasement of Iran. Instead, to
teach Iran a lesson, Trump authorized a cruise missile strike on a known
Islamic Revolutionary Guard Corps intelligence headquarters, destroying
three buildings and killing a dozen officers and an unknown number of
civilians.

Trump’s
advisers predicted that Iran would back down, but as nationalist fervor
grew in Iran, Tehran escalated the conflict, calculating that the
American public had no desire to spend more blood or treasure in the
Middle East. Kataib Hezbollah and other Shiite militias in Iraq, some
directed by Iran and others acting independently, launched further
attacks on U.S. personnel. Tehran forced the weak government in Baghdad
to demand the Americans’ departure from Iraq, which would deal a huge
blow to the U.S.-led campaign against the Islamic State, or ISIS.

As
Washington reimposed the sanctions that had been suspended by the
nuclear deal, Iran abandoned the limits on its enrichment of
uranium, expelled the UN monitors, and announced that it was no longer
bound by the agreement. With the CIA concluding that Iran was now back
on the path to a nuclear weapons capability, Trump’s top advisers
briefed the president in the Oval Office. Some counseled restraint, but
others, led by Bannon and Mattis, insisted that the only credible option
was to destroy the Iranian nuclear infrastructure with a massive
preventive strike, while reinforcing the U.S. presence in Iraq to deal
with the likely Iranian retaliation. Pompeo, a longstanding advocate of
regime change in Iran, argued that such a strike might also lead to a
popular uprising and the ousting of the supreme leader, an encouraging
notion that Trump himself had heard think-tank experts endorse on
television.

Once
again, nervous allies stepped in and tried to broker a diplomatic
solution. They tried to put the 2015 nuclear deal back in place, arguing
that it now looked attractive by comparison. But it was too late. U.S.
strikes on Iran’s nuclear facilities in Arak, Fordow, Isfahan, Natanz,
and Parchin led to retaliatory counterstrikes against U.S. forces in
Iraq, U.S. retaliation against targets in Iran, terrorist attacks
against Americans in Europe and the Middle East, and vows from Tehran to
rebuild its nuclear program bigger and better than before. The
president who had vowed to stop squandering American lives and resources
in the Middle East now found himself wondering how he had ended up at
war there.

FIGHTING CHINA

It
is October 2017, and experts are calling it the most dangerous
confrontation between nuclear powers since the Cuban missile crisis.
After a U.S.-Chinese trade war escalated well beyond what either side
had predicted, a clash in the South China Sea has led to casualties on
both sides and heavy exchanges of fire between the U.S. and Chinese
navies. There are rumors that China has placed its nuclear forces on
high alert. The conflict that so many long feared has begun.

Of
the many foreign targets of Trump’s withering criticism during the
campaign and the early months of his presidency, China topped the list.
As a candidate, Trump repeatedly accused the country of destroying
American jobs and stealing U.S. secrets. “We can’t continue to allow
China to rape our country,” he said. Bannon, who early in the
administration set up a shadow national security council in the White
House, had even predicted conflict withChina. “We’re going to war in the South China Sea in five to ten years,” he said in March 2016. “There’s no doubt about that.”

Not long after the election, Trump took a congratulatory phone callfrom Taiwanese President Tsai Ing-wen, breaking with decades of diplomatic tradition and suggesting a
potential change in the United States’ “one China” policy. It wasn’t
clear whether the move was inadvertent or deliberate, but either way,
Trump defended his approach and insisted that the policy was up for
negotiation unless China made concessions on trade. “Did China ask us if
it was OK to devalue their currency (making it hard for our companies
to compete), heavily tax our products going into their country (the U.S.
doesn’t tax them) or to build a massive military complex in the middle
of the South China Sea?” he tweeted. “I don’t think so!” In February 2017, after a call with Chinese President Xi Jinping, Trump announced that
the United States would honor the “one China” policy after all. Asia
experts were relieved, but it must have infuriated the president that so
many thought he had backed down. “Trump lost his first fight with Xi
and he will be looked at as a paper tiger,” Shi Yinhong, a professor at
Renmin University of China, toldThe New York Times.

There
were other early warning signs of the clashes to come. At his
confirmation hearings for secretary of state, Rex Tillerson appeared to draw a new redline in
the South China Sea, noting that China’s access to islands there “is
not going to be allowed.” Some dismissed the statement as overblown
rhetoric, but Beijing did not. The state-run China Daily warned that any attempt to enforce such a policy could lead to a “devastating confrontation,” and the Global Times said it could lead to “large-scale war.”

Then there were the disputes about trade. To head the new White House National Trade Council, Trump nominated Peter Navarro, the author of The Coming China Wars, Death by China,
and other provocative books that describe U.S.-Chinese relations in
zero-sum terms and argue for increased U.S. tariffs and trade sanctions.
Like Bannon, Navarro regularly invoked the specter of military conflict
with Beijing, and he argued that tougher economic measures were
necessary not only to rectify the U.S.-Chinese trade balance but also to
weaken China’s military power, which he claimed would inevitably be
used against the United States. The early rhetoric worried
many observers, but they took solace in the idea that neither side could
afford a confrontation.

It
was the decisions that followed that made war all but inevitable. In
June 2017, when North Korea tested yet another long-range missile,
which brought it closer to having the ability to strike the United
States, Trump demanded that China check its small ally and announced
“serious consequences” if it refused. China had no interest in promoting
North Korea’s nuclear capacity, but it worried that completely
isolating Pyongyang, as Trump was demanding, could cause the regime to
collapse—sending millions of poor North Korean refugees streaming into
China and leaving behind a united Korea ruled by Seoul, armed with
North Korea’s nuclear weapons, and allied with Washington. China agreed
to another UN Security Council statement condemning North Korea and
extended a suspension of coal imports from the country but refused to
take further action. Angry about Trump’s incessant criticism
and confrontation over trade, Xi saw the United States as a greater
danger to China than North Korea was and said he refused to be bullied
by Washington.

At
the same time, the U.S. current account deficit with China had swelled,
in part because growing U.S. budget deficits required borrowing from
abroad, thus driving up the value of the dollar. That, combined with
Chinese intransigence over North Korea, convinced the White House that
it was time to get tough. Outside experts, along with Trump’s own
secretary of state and secretary of the treasury, cautioned against the
risks of a dangerous escalation, but the president dismissed their
hand-wringing and said that the days of letting China take advantage of
Americans were over. In July, the administration formally branded China a
“currency manipulator” (despite evidence that it had actually been
spending its currency reserves to uphold the value of the yuan) and
imposed a 45 percent tariff on Chinese imports. To the delight of the
crowd at a campaign-style rally in Florida, Trump announced that these
new measures would remain in place until China boosted the value of its
currency, bought more U.S. goods, and imposed tougher sanctions on North
Korea.

The
president’s more hawkish advisers assured him that China’s response
would prove limited, given its dependence on exports and its massive
holdings of U.S. Treasury bonds. But they underestimated the intense
nationalism that the U.S. actions had stoked. Xi had to show strength,
and he hit back.

All Trump wanted to do was get a better deal from China.

Within
days, Xi announced that China was taking the United States to the World
Trade Organization over the import tariff (a case he felt certain China
would win) and imposed a 45 percent countertariff on U.S. imports. The
Chinese believed that the reciprocal tariffs would hurt the United
States more than China (since Americans bought far more Chinese goods
than the other way around) and knew that the resulting
inflation—especially for goods such as clothing, shoes, toys, and
electronics—would hurt Trump’s blue-collar constituency. Even more
important, they felt they were more willing to make sacrifices than the
Americans were.

Xi
also instructed China’s central bank to sell $100 billion in U.S.
Treasury bonds, a move that immediately drove up U.S. interest rates and
knocked 800 points off the Dow Jones industrial average in a single
day. That China started using some of the cash resulting from the sales
to buy large stakes in major U.S. companies at depressed prices only
fueled a nationalist reaction in the United States. Trump tapped into
it, calling for a new law to block Chinese investment.

With
personal insults flying back and forth across the Pacific,
Trump announced that if China did not start treating the United States
fairly, Washington might reconsider the “one China” policy after all.
Encouraged by Bannon, who argued privately that it was better to have
the inevitable confrontation with China while the United States still
enjoyed military superiority, Trump speculated publicly about inviting
the president of Taiwan to the White House and selling new antimissile
systems and submarines to the island.

China
responded that any change in U.S. policy toward Taiwan would be met
with an “overwhelming response,” which experts interpreted to mean at a
minimum cutting off trade with Taiwan (which sends 30 percent of its
exports to China) and at a maximum military strikes against targets on
the island. With over one billion Chinese on the mainland passionately
committed to the country’s nominal unity, few doubted that Beijing meant
what it said. On October 1, China’s normally tepid National Day
celebrations turned into a frightening display of anti-Americanism.

It
was in this environment that an incident in the South China Sea led to
the escalation so many had feared. The details remain murky, but it was
triggered when a U.S. surveillance ship operating in disputed waters in
heavy fog accidentally rammed a Chinese trawler that was harassing it.
In the confusion that ensued, a People’s Liberation Army Navy frigate
fired on the unarmed U.S. ship, a U.S. destroyer sank the Chinese
frigate, and a Chinese torpedo struck and badly damaged the destroyer,
killing three Americans.

A
U.S. aircraft carrier task force is being rushed to the region, and
China has deployed additional attack submarines there and begun
aggressive overflights and patrols throughout the South China Sea.
Tillerson is seeking to reach his Chinese counterpart, but officials in
Beijing wonder whether he even speaks for the administration and fear
Trump will accept nothing short of victory. Leaked U.S. intelligence
estimates suggest that a large-scale conflict could quickly lead to
hundreds of thousands of casualties, draw in neighboring states, and
destroy trillions of dollars’ worth of economic output. But with
nationalism raging in both countries, neither capital sees a way to back
down. All Trump wanted to do was get a better deal from China.

THE NEXT KOREAN WAR

It
is December 2018, and North Korea has just launched a heavy artillery
barrage against targets in Seoul, killing thousands, or perhaps tens of
thousands; it is too soon to say. U.S. and South Korean forces—now
unified under U.S. command, according to the provisions of the Mutual
Defense Treaty—have fired artillery and rockets at North
Korea’s military positions and launched air strikes against its advanced
air defense network. From a bunker somewhere near Pyongyang, the
country’s erratic dictator, Kim Jong Un, has issued a statement
promising to “burn Seoul and Tokyo to the ground”—a reference to North
Korea’s stockpile of nuclear and chemical weapons—if the “imperialist”
forces do not immediately cease their attacks.

Even Trump’s harshest critics acknowledge that the United States had no good choices in North Korea.

Washington
had expected some sort of a North Korean response when it preemptively
struck the test launch of an intercontinental ballistic missile capable
of delivering a nuclear warhead to the continental United States,
fulfilling Trump’s pledge to prevent Pyongyang from acquiring that
ability. But few thought North Korea would go so far as to risk its own
destruction by attacking South Korea. Now, Trump must decide whether to
continue with the war and risk nuclear escalation—or accept what will be
seen as a humiliating retreat. Some of his advisers are urging him
to quickly finish the job, whereas others warn that doing so would cost
the lives of too many of the 28,000 U.S. soldiers stationed on the
peninsula, to say nothing of the ten million residents of
Seoul. Assembled in the White House Situation Room, Trump and his aides
ponder their terrible options.

How did it come to this? Even Trump’s harshest critics acknowledge that the United States had no good choices in North Korea.
For more than 20 years, the paranoid, isolated regime in Pyongyang had
developed its nuclear and missile capabilities and seemed impervious to
incentives and disincentives alike. The so-called Agreed Framework, a
1994 deal to halt North Korea’s nuclear program, fell apart in 2003 when
Pyongyang was caught violating it, leading the George W. Bush
administration to abandon the deal in favor of tougher sanctions.
Multiple rounds of talks since then produced little progress. By 2017,
experts estimated that North Korea possessed more than a dozen nuclear
warheads and was stockpiling the material for more. They also thought
North Korea had missiles capable of delivering those warheads to targets
throughout Asia and was testing missiles that could give it the
capacity to strike the West Coast of the United States by 2023.

Early in the administration, numerous outside experts and former senior officials urged Trump to
make North Korea a top priority. Accepting that total dismantlement of
the country’s nuclear and missile programs was not a realistic nearterm
goal, most called for negotiations that would offer a package of
economic incentives and security assurances in exchange for a halt to
further testing and development. A critical component, they argued,
would be outreach to China, the only country that might be able to
influence North Korea.

But
the administration preferred a more confrontational approach. Even
before Trump took office, when Kim blustered about developing the
capacity to strike the United States with a nuclear weapon, Trump responded on Twitter: “It won’t happen!” On February 12, 2017, North Korea fired a testmissile 310
miles into the Sea of Japan at the very moment Trump was meeting with
Japanese Prime Minister Shinzo Abe at his Mar-a-Lago estate, in Florida.
The next morning, Stephen Miller, a senior adviser to Trump, announced that
the United States would soon be sending a signal to North Korea in the
form of a major military buildup that would show “unquestioned military
strength beyond anything anyone can imagine.” Later that month, Trump announced plans for a $54 billion increase in
U.S. defense spending for 2018, with corresponding cuts in the budget
for diplomacy. And in March 2017, Tillerson traveled to Asia and declared that “the political and diplomatic efforts of the past 20 years” had failed and that a “new approach” was needed.

In
the ensuing months, critics urged the administration to accompany its
military buildup with regional diplomacy, but Trump chose otherwise. He
made clear that U.S. foreign policy had changed. Unlike what his
predecessor had done with Iran, he said, he was not going to reward bad
behavior. Instead, the administration announced in the summer of 2018
that North Korea was “officially on notice.” Although the White House
agreed with critics that the best way to pressure North Korea was
through China, it proved impossible to cooperate with Beijing while
erecting tariffs and attacking it for “raping” the United States
economically.

Thus
did the problem grow during the administration’s first two years. North
Korea continued to test missiles and develop fissile material. It
occasionally incited South Korea, launching shells across the
demilitarized zone and provoking some near misses at sea. The war of
words between Pyongyang and Washington also escalated—advisers could not
get the president to bite his tongue in response to Kim’s outrageous
taunts—and Trump repeated in even more colorful language his Twitter
warning that he would not allow Pyongyang to test a nuclear-capable
missile that could reach the United States.

When
the intelligence community picked up signs that Pyongyang was about to
do so, the National Security Council met, and the chairman of the Joint
Chiefs of Staff briefed the president on his options. He could try to
shoot down the test missile in flight, but shooting carried a high risk
of missing, and even a successful intercept might provoke a military
response. He could do nothing, but that would mean losing face and
emboldening North Korea. Or he could destroy the test missile on its
launch pad with a barrage of cruise missiles, blocking Pyongyang’s path
to a nuclear deterrent, enforcing his redline, and sending a clear
message to the rest of the world. Sources present at the meeting
reported that when the president chose the third option, he said, “We
have to start winning wars again.”

LEARNING FROM THE FUTURE

These
frightening futures are far from inevitable. Indeed, for all the early
bluster and promises of a dramatic break with the past, U.S.
foreign policy may well turn out to be not as revolutionary or reckless
as many fear. Trump has already demonstrated his ability to reverse
course without compunction on a multitude of issues, from abortion to
the Iraq war, and sound advice from some of his more seasoned advisers
could moderate his potential for rash behavior.

On
the other hand, given what we have seen so far of the president’s
temperament, decision-making style, and foreign policy, these visions of
what might lie ahead are hardly implausible: foreign policy disasters
do happen. Imagine if a ghost from the future could have given world
leaders in 1914 a glimpse of the cataclysm their policies would produce.
Or if in 1965, U.S. President Lyndon Johnson could have seen what
escalation in Vietnam would lead to a decade later. Or if in 2003, U.S.
President George W. Bush could have been shown a preview of the results
of the invasion of Iraq. In each case, unwise decisions, a flawed
process, and wishful thinking did lead to a catastrophe that could have
been, and often was, predicted in advance.

Maybe
Trump is right that a massive military buildup, a reputation for
unpredictability, a high-stakes negotiating style, and a refusal to
compromise will convince other countries to make concessions that will
make America safe, prosperous, and great again. But then again, maybe he’s wrong

lunes, 13 de marzo de 2017

Speech by the High Representative/Vice-President Federica Mogherini at the AmCham EU Transatlantic Conference

Brussels, 10/03/2017 - 21:11 1

Remarks/speeches

Speech
by the High Representative/Vice-President Federica Mogherini at the
AmCham EU Transatlantic Conference “Room for three? The implications of
Brexit on the EU-US relationship”

Brussels, 10 March 2017

Thank
you very much. First of all for the invitation, but also for hosting me
in this room, that reminds me of my times in the NATO Parliamentary
Assembly (PA), because this is the room where the NATO PA sessions in
Brussels normally take place. So this is a very familiar transatlantic
set up for me. Thank you, Susan [Danger, CEO of AmCham EU], for all of
these things combined.

For me this is really a very good
opportunity, not only to address you, but also to have an exchange of
views later on. I think this conversation is crucial, coming at a
crucial time, where Europe is reflecting upon its future, the United
States are reflecting on the directions they're taking, the United
Kingdom is reflecting on the direction to take. And the business
community in all of this has, I believe, a key role to play.

I
will try to align myself with the positive mood, especially of your
study, and start from a positive point. I believe that in Europe it is
time we start to focus on how strong we are. And I know this can sound
strange for you to hear, because we normally associate the words Europe,
or European Union, with the word crisis in these times. And yet, if you
look at the numbers, if you look at the reality, it's quite obvious
this is still the best place in the world where you can live, do
business and improve your lives.

Sometimes, us Europeans we don't
realise how much we have gained over the last 60, 70 years, also thanks
to the transatlantic cooperation we have put in place. And also thanks
to our American friends. For which the gratitude will never end. And
being an Italian I can say this, remembering parts of the history that
my grandmother and grandfather were sharing with me.

This
positive narrative about how strong Europe is goes beyond the
discussions on Brexit. First of all, because eight months after the
referendum we have not yet started even. The notification has not
arrived. There is a democratic debate in the United Kingdom about that
of which we are very much respectful, but again, the European Council
that met yesterday was a Council at 28. I'm chairing three formations of
the Council: Foreign Ministers, Defence Ministers, Development
Ministers, and I have as a chair the responsibility of building
consensus at 28.

And the news is, we do take decisions at 28, by
consensus, the last ones, some of them very important, just a few days
ago here in Brussels. So, the news is, even if everyone is talking about
Brexit, Brexit has not even yet started. And it will take two years
from when it will start. I know most of you know this in the room, but
I'm not sure our public opinions understand that we're not there yet.
So, yes we have a changing environment, but we have also some solid
realities that we need to take into consideration.

Going back to
how strong we are: for seventy years, Europeans have relied strongly on
our Americans, on our friends and allies. They have helped us rebuild
our continent after the war, they have been the pillar of our common
security. And in seventy years we, Europeans, have become a global
power. This is also a word that we don't normally associate with Europe.
Power. But indeed if you look at the numbers, we are a real global
power.

We're going to celebrate the 60th Anniversary of the Rome
Treaty. So we are grown up and it's time we realise how much we have
grown in this decades. We are today part of the world’s economic G3, we
are the leading trading partner and foreign investor at all corners of
the world, everywhere, from Asia to Latin America, and we are a global
security provider, more and more so.

So, I believe the European
Union is an indispensable partner for the United States. And let me take
this opportunity to thank publicly, as I have done privately several
times, someone who is in this room and has worked enormously on
strengthening the transatlantic cooperation in these years here in
Brussels and that I understand has enjoyed also your awards this
morning. Tony [Anthony Gardner, former US Ambassador to the EU], grazie
mille. He has been a great ambassador here in Brussels and I wish you
all the best for the continuation of your wonderful career. Grazie.

This
to thank him, but also to thank you for awarding him because I think
you made a wise choice. He has touched first hand, and he has promoted
first hand, this indispensable partnership we have across the Atlantic.
And by the way, let me tell you something here that I normally say to
our American friends who are not from the United States, but that I
really believe is true. When we talk about the transatlantic relations,
we don’t only talk about the Europeans and Washington, or the United
States. Because across the Atlantic from Europe are also Canada, Mexico
and the entire Latin America. And that is also part of the transatlantic
relations for us.

But this partnership we have, between the
United States and the European Union, is an indispensable partnership
for both of us. In all my first meetings, both in Washington DC, and
here in Brussels or in other parts of Europe, in these first months, I
have seen great interest and respect towards the European Union. I know
this is not always the public message that comes across from DC, or from
other places in the United States, but in all my meetings, with
Vice-President Pence, with Secretary Tillerson, with Secretary Mattis,
the message has been loud and clear. Also publicly here in Brussels
from Vice-President Pence.

And the message has been: United
States recognise the added value of the European Union and of our
cooperation. And we want to do even more together in some of the fields
that are key for both of us. And I believe the fact that Vice-President
Pence paid an official visit to the European Union institutions here in
Brussels is in itself quite a political message. I'm going to be in
Washington again for my second visit in a month next week for other
meetings and for our common work on the counter-terrorism and
anti-Da'esh Coalition of which we are part.

We realise there is
work to do together, we realise we need each other. We need each other
on security issues – Europe needs the United States, but also the United
States need Europe and the European Union. We need each other because,
first of all, the challenges we're facing are common and they go beyond
our borders. If you think of the real security challenges we are facing
today: think of the online propaganda of terrorist groups, think of
terrorist financing - and I could go on with a long list - you don't
really tackle these issues within national borders. The threats go
transnational and our work to face them and to fight them has to be
based also on international cooperation.

Isolation is not giving
an answer to the threats that our citizens are facing, first of all in
the security sphere. And in fact the cooperation, the data cooperation
of our agencies, among our agencies, for instance on counter-terrorism
is getting more and more intense by the day. So when you look at the
practical cooperation of our people on the daily work they do,
counter-terrorism for instance, is growing, is increasing every single
day.

We need each other also because we are complementary. There
has been a lot of discussions around the burden sharing across the
Atlantic, on defence for instance. This is more of a NATO debate, that I
will leave to my friend Jens Stoltenberg [NATO Secretary General] to
manage. But there are a couple of examples I always use, both with my
European and my American friends.

No matter of how much of the
GDP a Member State of the European Union or a NATO ally spends on
defence, invests on defence, there is one number - actually two numbers -
that tell us a lot. Europeans invest 50% compared to the Americans on
defence. The output of this investment in Europe is 15% of the output in
the United States. This means that, yes, we have to have reflection on
how much Europeans spend on defence, but we can have an immediate work
on bridging the gap on the output. This can be done immediately - and
what is the difference? Why is our output on defence so poor, compared
to the one in the United States? Simply because of the economy of scale.
The Europeans do not invest together on defence, while the economy of
scale in the United States is definitely more convenient for better
output of investments.

If you want to tackle this issue, then
you need the European Union, because the European Union is the only one
that can incentivise defence cooperation among Member States. Most of
them are also allies within NATO and this will increase the burden
sharing across the Atlantic. So if you want to improve the defence
cooperation within NATO you have to use EU instruments to incentivise
cooperation on defence among Members States of the European Union. This
is how we are interlinked, this is how we can work together. This is why
also our work on strengthening the European defence is making NATO
stronger and a stronger NATO makes also America strong.

Also,
because no country has the resources to address today’s crises alone. If
you take Syria or Iraq, for instance, military power is essential, but
it is not enough – neither to end the war nor to win the peace. And we
have learned some lessons in the past. Europe’s diplomatic network,
power, work - we are the only ones who talk to all the players in the
region and beyond. And also our humanitarian support: we are the first
donor worldwide and we are by far the first humanitarian donor for Syria
and Iraq.

This work is essential. Our European Union experts are
demining the liberated areas in Iraq; our engineers are working at the
Mosul dam; our investments are supporting the economy of countries
hosting millions of refugees around Syria – and I could continue. When
the reconstruction of Syria will begin, and at a certain moment we will
get to post-conflict also there - even if we are not there yet -, the
European Union will be there to accompany a political transition. We
will host a conference here in Brussels less than in one month from now,
together with the United Nations, to look at the positive economic
incentives that can be put on the table of negotiations to create the
peace dividends for the Syrians to engage seriously in a political
transition.

America needs this power of Europe as well as Europe
needs the power of America – not just in our region, not just in the
Middle East, but even inside the United States. During last year’s
Louisiana floods and Hurricane Matthew in Florida, the European Union
put at America’s disposal our Copernicus satellite system, one of the
most advanced technologies on earth for high-resolution maps: a tiny
example of things that we do together.

And beyond security, the
European Union remains – and here I get to economy - the most attractive
market and the largest source of investments in the world, including in
the United States, and including without the UK in the moment when this
will happen and, again, I stress, this has not even started yet.

We
know the numbers – actually I guess you know the numbers better than I
do, and I am sure in that report you will find many of them -, but let
me just mention a couple of facts. European majority-owned firms employ
more than four million Americans inside the United States, and more than
two and a half million jobs depend on exports towards the European
Union in the United States. Almost three quarters of Foreign Direct
Investments - three quarters - in the United States come from Europe and
the share has been rising in recent years enormously.

Let me
share one good story with you in a field that normally is not taken into
consideration as top priority, wrongly so: research. A few years ago
the European Commission launched an international consortium for
research on rare diseases and the idea was to join forces among
institutions, the business sector and NGOs, on both sides of the
Atlantic, and to develop 200 new therapies for rare diseases by 2020.
Well, they have managed to achieve their result last year, four years
ahead of schedule. And thanks to our transatlantic cooperation, in a
field such as research. So, transatlantic cooperation makes us strong –
for sure stronger – on research and technology as much as on defence.
Three quarters of research performed by foreign companies in the US come
from Europe.

And there are three times more American students in
European universities; I have the impression that the Italian
universities contribute a lot at least for the attraction that Italy can
have on the American students. So there are three times more American
students in European universities than European students in American
universities. Our top class public education – let me say so because I
am proud of that – is incredibly attractive for Americans. I guess also
our food, our way of life, our weather - maybe not here in Brussels, but
in other parts of Europe - and they are bringing back home in the
United States the knowledge, the expertise, the lifestyle they get here
in Europe and that many in the United States appreciate, including in
the new US administration. Europe is attractive for Americans. Everyone
in this room understands this perfectly well. And Europe will continue
to be attractive even after Brexit, when, eventually, it will happen.

I
really don’t want to underestimate the impact of the UK decision. The
referendum was painful and we all wished here in Brussels for sure that
this was not going to be the decision that the voters in the United
Kingdom would have taken. Because we know perfectly well the enormous
contribution that the United Kingdom gave to our economy, to our foreign
policy, to our strong transatlantic relations. Before the vote, as I
had said, we hoped the British citizens would decide to remain. But I
believe their decision to leave will have tougher consequences for
Britain than for the European Union. It is not a wish, it is looking at
reality of what is happening already now and what kind of impact this
will have on the United Kingdom itself.

We will still be in the
European Union the leading foreign investor in the world, and the main
donor for international development or humanitarian aid. We will still
be the largest global market on earth including for American businesses,
and you know that well. More than 400 million people with the same
rules, the same protections and the same standards. Something nobody
else in the world can compete with in terms of attractiveness of unique
market.

Some believe the European Union is too big to be an
efficient system; I know that this is quite common as a narrative:
bureaucratic, it doesn't work, it is too slow, it is too complicated.
Part of it is true. I was fighting myself in the first couple of days
because you do not really have much time to take time at the beginning
of this job just to look at the organigram of our institutions. It is
complex. Let me tell you that being expert in complexity in the world of
today is not a minor issue. It gives you some instruments to understand
complexity also outside of yourself.

Let me tell you something:
two days after the British referendum, I presented a Global Strategy for
foreign and security policy of the European Union to the Heads of State
and Government of the 28 Member States. That was in the end of June.
Eight months after, the British government has not even notified us of
their decision to leave the European Union. I am not talking about
setting up the negotiations. I am saying that: that the referendum –
that was a clear political choice – did not have an institutional
translation. It did not have an impact in our lives; and Theresa May
[Prime Minister of the United Kingdom] was sitting at the [European]
Council yesterday as all the other Member States.

Why? Because -
and I have great respect for this - democracy can require time,
including the UK democracy. There are procedures, there are systems to
be put in place and things to be prepared in the United Kingdom that is
an important country but one country. So democracy takes time, democracy
takes decision-making, democracy takes discussions, voting and if you
take this to the continental scale of the European Union, you will
understand easily that you can make the comparison. If it takes more
than eight months for the United Kingdom to notify a political decision
that was taken by referendum, you understand that European Union
procedures can take time.

And yet, in the meantime, in these
eight months, the implementation of that Global Strategy I presented
back in late June has moved fast, with unity and with determination. And
last Monday we agreed unanimously to set up a first unified command
structure for our military missions of the European Union. We are
creating a European Defence Fund to promote cooperative procurement,
have larger research programmes and more predictable investments in the
field of defence. And you understand how important this can be for the
European defence industry. And in this field, we have achieved more in
these eight months than in the previous 60 years. So are we sure that we
are so slow? Are we sure we are so divided? Are we sure it [the EU] is
such a dysfunctional body?

I am actually seeing a lot of
potential in our Union and I belong to that generation that has lived
the European Union as the dream of the European identity. My mother and
father were the ones betting on the European Union as the way to peace
and they won this bet. My generation has seen the peace becoming a
reality, we have it for granted. We should look at the Balkans and not
have it too much for granted. But the European Union has brought to our
continent sixty years of peace, because we have simply realised that
making business was much more convenient than making war. It is a very
basic principle you would all share.

But my generation was the
generation that was betting on the common European identity: Erasmus,
Schengen, the currency, the dream. Today, we have the peace - not sure
if we have the dream anymore -, but we still have the Erasmus, the
Schengen, the euro plus today we live in a time of the indispensable
European Union. There is no other way in which the Europeans can regain
sovereignty in the global world if not through the Union. I know there
are a lot of talks about regaining sovereignty, but if you look at the
continent sized powers in the world, from the Americans, the United
States, to China, India, Brazil, I often say that there are only two
kinds of Member States in the European Union: the ones that are small
and the ones that have not yet realised they are small. So you need to
be united if you want to count to protect your citizens, to make good
trade agreements and to play the role you can play in economy, in trade,
in foreign policy, in defence, in security, in energy, in culture.

And,
by the way, let me tell you something on trade - and then I will
finish: I know that there is a bit of misunderstanding across the
Atlantic about a story that the Member States of the European Union
cannot conclude or negotiate trade agreements bilaterally with third
countries. I know President [of the United States of America, Donald]
Trump was impressed – to say diplomatically – when Theresa May explained
to him that the United Kingdom cannot negotiate a bilateral trade
agreement between the United Kingdom and the United States as long as
they are a Member of the European Union as this is going to be at least
for the next two years plus, whenever they will start the notification
process.

And I know the perception might be: ‘this is a prison,
if you cannot even negotiate a bilateral trade agreement’. No, it is not
a prison, it is a guarantee. It is a guarantee for us because we are
much stronger if we negotiate as European Union, so big and so powerful.
So it might be natural for the ones that you negotiate with that they
wish you were weaker and negotiate bilaterally, nationally, but it does
not defend European citizens as much as negotiating as the European
Union, because this gives you the strength to negotiate a good deal. So
we are also good negotiators. We know how to make deals and we know how
to protect our citizens and we are stronger if we are together as
European Union.

It is a matter of size, it is a matter of
economic power, it is a matter of relevance. But it is also – and here
it comes another element – that it is very important for us, it is also
the guarantee that whatever trade agreements we conclude with partners
around the world we do it as the European Union and this guarantees
European citizens that there is no distinction, there is no inequality
on the positive impact that trade agreement will have in one part of
Europe or another. This is the way of protecting Europeans in the world
as globalised as it is today. This is why I have to tell you I am proud
our trade agreement with Canada – CETA [Comprehensive Economic and Trade
Agreement]; I am proud we are moving fast and well with others partners
in the world on trade agreements, from Mexico to Japan and I could
continue - both in Latin America and in Asia. And I see that our
partners in the world are looking at the European Union today as a
reliable, indispensable partners, also to strengthen the system of free
and fair trade in the world.

We believe it is possible to have a
trade that is free and fair and we believe that is essential to build,
to protect and promote rules of the game that make sure that trade
benefits equally everyone. This is our idea of free and fair trade. We
can push for better protection for workers, higher standards on food
safety, stronger recognition on trademark products, with more
opportunities for the entrepreneurs.

As a Union of half billion
people we have the size, we also have the impact globally to work for
that. When we say rules-based global order, we do not only refer to
multilateralism and security, we also refer to global system of trade
that is guaranteed by rules, because rules are not something that are
limiting or binding our freedom - rules are the guarantees for all that
the play is fair. So this is our idea for free and fair trade. This is
what we propose to our friends all over the world. These are our
principles, our values, our interests that we believe we share with our
American friends. And this is the foundation that we want to use as we
engage with our partners, including with the United States of America.

I
know we might not always agree on everything and we are probably
entering into a time of a more pragmatic approach, but we are ready to
be extremely constructive and not only pragmatic, because I believe our
interests converge - in the economic field, in the security field. When
we look at our citizens’ lives, I think we have much more that we can do
together than issues on which our ways will go apart.

We know
where we stand and what we want to achieve. For all those who share the
same goals, the European Union is, as I said in the beginning, an
indispensable partner for Europeans and an indispensable tool to play
our role in the world. And we will be even more indispensable in the
future as a force for multilateralism, for a fairer globalisation, for
an open and cooperative global order and I believe, also, for an
economic growth that can benefit businesses, trade but also the life of
our citizens. I thank you very much and I am looking forward to our
exchange.